Momentum Group Limited · JSE:MTM
Momentum — Momentum Metropolitan Holdings — Debt Investor Presentation (December 2020)
32 slides from Momentum's debt investor presentation, December 2020
Slide 1: Momentum Metropolitan Debt Investor Roadshow
Momentum Metropolitan Debt Investor Roadshow 3 – 7 December 2020
Slide 2: Momentum Metropolitan Holdings team and key contacts
Momentum Metropolitan Holdings team and key contacts Rand Merchant Bank Delia Patterson DCM Distribution Delia.Patterson@rmb.co.za Leigh.Cunningham- Leigh Cunningham-Scott DCM Origination Scott@rmb.co.za Nick Tunnicliffe DCM Origination Nick.Tunnicliffe@rmb.co.za Oarabile Komati DCM Origination Oara
Slide 3: Agenda
Agenda Part Financial results 01 Part Strategic overview 02 Part Capital Management & Solvency 03 Part Instrument structure 04
Slide 4: Financial results
Financial results On
Slide 5: Full year F2020
. ae Full year F2020
Slide 6: Key financial measures – June 2020
Key financial measures – 30 June 2020 Normalised headline earnings (Rm) Normalised headline earnings per share (cents) F2019 3,074 F2019 203 -51% -50% F2020 1,521 F2020 102 Present value of premiums (PVNBP, Rm) Value of new business (Rm) F2019 55,783 F2019 541 -48% -10% F2020 280 F2020 50,447 Embedd
Slide 7: Resilience — diversified sources of earnings
Resilience — diversified sources of earnings 80 440 162 618 338 668 30 June 2019 30 June 2020 (R’m) (R’m) 555 1 029 319 386 Investment returns Asset-based fees Administration fees Underwriting profits Spreads
Slide 8: Quarter 1 F2021
Quarter 1 F2021
Slide 9: Key financial measures
Key financial measures For the three months ended 30 September 2020 Normalised headline earnings (Rm) Value of new business (Rm) 1Q20 882 1Q20 100 +18% +6% 1Q21 1,042 1Q21 106 Normalised headline earnings (Rm) Present value of premiums (PVNBP, Rm) 1Q20 524 358 882 1Q20 12,978 +18% +3% 1Q21 846 196 1
Slide 10: Sales increased by 3% year-on-year
Sales increased by 3% year-on-year Present value of premiums (PVNBP, R’m) 17,113 Year-on-year movements 15,205 Momentum Life –14% 13,256 13,425 12,978 Momentum Investments +30% 12,431 11,677 11,788 11,782 Metropolitan Life –15% Momentum Corporate –50% Africa +22% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4
Slide 11: Value of new business is 6% above prior year
Value of new business is 6% above prior year +6% 106 100 +113% 64 +31% 51 39 -54% 30 26 12 <0% <0% 5 0 -7 1Q20 -14 1Q21 Momentum Life Momentum Metropolitan Life Momentum Momentum Momentum Investments Corporate Metropolitan Africa Metropolitan
Slide 12: New business margin in line with prior year
New business margin in line with prior year 4.6% 1Q20 1Q21 3.0% 1.3% 0.9% 0.8% 0.8% 0.7% 0.7% 0.4% 0.0% -1.1% -1.0% Momentum Life Momentum Metropolitan Life Momentum Momentum Momentum Investments Corporate Metropolitan Africa Metropolitan
Slide 13: Normalised headline earnings by business unit
Normalised headline earnings by business unit 25 38 37 64 10 22 87 882 3 1 042 Sept Momentum Momentum Metropolitan Momentum Non-life Momentum New Shareholders Sept 2019 Life Investments Life Corporate Insurance Metropolitan Initiatives and Health Africa
Slide 14: Impact of Covid-19 on our normalised headline earnings
Impact of Covid-19 on our normalised headline earnings Termination Our Covid-19 provisions reduced earnings by R983 Non-life 82 Mortality million Insurance claims 64 Release of provision during 63 1Q21 is R174 million Morbidity 62 601 Assumptions based on best 1 521 estimate basis Largest impact exp
Slide 15: Strategic overview
Strategic overview !
Slide 16: Reset and Grow progress - June 2020
Reset and Grow progress - 30 June 2020 RESET GROW Fix the basics Distribution Service Address cost base Products Marketing 4 100 R4 billion 3 900 3 700 R3.6 billion 3 500 3 300 3 100 R3.1 billion 2 900 R2.8 billion 2 700 F2018 F2019 F2020 F2021 R million
Slide 17: Reset and Grow
Reset and Grow Revised target range 4,000 4,000 3,900 3,600 3,600 3,400 2,900 2 800 2,400 1,900 1 500 1,400 F2018 F2019 F2020 F2021 F2022 F2023 Low-road R&G High-road R&G New low-road forecast New high-road forecast
Slide 18: Employee Share Ownership Program
Employee Share Ownership Program B-BBEE ESOP • 3% of Momentum Metropolitan Holdings ordinary shares • All current and future South African based permanent employees • 85% black shareholding Improves black ownership credentials Now approved by shareholders
Slide 19: Capital Management & Solvency
Capital Management & Solvency
Slide 20: Capital management – strong capital coverage
Capital management – strong capital coverage 33% Momentum 28% Regulatory solvency position 3% Metropolitan (R million) 3% Life 28% Eligible own funds (pre-dividend) 29 067 Solvency Capital Requirement 15 737 (SCR) 184% 177% 157% SCR cover (times) 1.85 SCR cover (times) - 30 June 2019 2.08 Core Tier
Slide 21: Capital management – sustainable dividend policy
Capital management – sustainable dividend policy NHE capital distribution cover (history and forecast) 3.0x 2.90x Dividend decreased by 43% 2.5x Dividend policy is to pay out 2.0x 33% to 50% of normalised headline earnings 1.46x Loss for 2H20 implied zero 1.05x 0.96x 0.97x 2H20 dividend under divide
Slide 22: Capital management
Capital management 30 September 2020 Regulatory solvency position Momentum Metropolitan (R million) Life Eligible own funds (pre-dividend) 29 589 Solvency Capital Requirement (SCR) 16 022 SCR cover (times) – 30 September 2020 1.85 SCR cover (times) - 30 June 2020 1.85 Investment of Capital - Conserv
Slide 23: Capital management
Capital management Strong and resilient solvency position under different stresses Rbn Stress Tests: MML - 30 June 2020 35.0 2.00x Stress tests 1.91x descriptions 1.85x 1.90x 30.0 Int – 2.5%: 250bps 1.78x 1.80x decrease in nominal 25.0 interest rates 1.70x Int + 2.5%: 250bps 20.0 increase in nominal
Slide 24: Capital management - Gearing
Capital management - Gearing Momentum Metropolitan Life Limited 30-Jun-19 30-Jun-20 Equity 14,317 12,311 Preference shares 500 Unsecured subordinated debt 4,431 4,431 Total debt + Equity 19,248 16,742 IFRS gearing 26% 26% Cumulative Maturity Profile : Backing Assets vs. Sub-Debt - 30-Jun-2020 5,000
Slide 25: Capital management - Gearing
Capital management - Gearing Maturity profile managed well Subordinated debt maturity profile - 30 September 2020 MMIG05 R980m MMIG02 MMIG06 MMIG07 MML01 & MML02 MML03 R750m R750m R750m R750m R750m MMIG04 R270m 2020 2021 2022 2023 2024 2025 2026 2027 17-Mar-21 15-Aug-22 19-Oct-23 18-Sep-24 15-Aug-25
Slide 26: Instrument details
Instrument details OZ
Slide 27: MML Credit rating
MML Credit rating • Credit rating issued by Moody’s Investor services. • On 25 November 2020, amended the ratings of a number of South African Insurers including that of MML following the rating action on the South African Government on 20 November 2020. The outcome of the amendment is that the Insu
Slide 28: Instrument structure – Floating rate note
Instrument structure – Floating rate note Issuer Momentum Metropolitan Life Limited Insurer Financial Strength Aaa.za Credit ratings Issuer Aa1.za Subordinated Debt Aa3.za Rating Agency Moody’s Investor Service Programme ZAR10bn Subordinated Note Programme listed on the Interest Rate Market of the J
Slide 29: Instrument structure – Fixed rate note
Instrument structure – Fixed rate note Issuer Momentum Metropolitan Life Limited Insurer Financial Strength Aaa.za Credit ratings Issuer Aa1.za Subordinated Debt Aa3.za Rating Agency Moody’s Investor Service Programme ZAR10bn Subordinated Note Programme listed on the Interest Rate Market of the JSE
Slide 30: Indicative timelines
Indicative timelines Date Action item 03 – 07 December 2020 Investor roadshow January/ February 2021 Termsheet, draft applicable pricing supplement(s) and auction details released to investors January/ February 2021 Moody’s pre-sale rating released on MML03 and MML04 January/ February 2021 Updated t
Slide 31: Disclaimer
Disclaimer The information contained in this presentation is confidential and is intended solely for this presentation This presentation may contain information proprietary to Momentum Metropolitan Holdings Limited (“the Company”) and may not be reproduced or disseminated in whole or in part without
Slide 32: Thank you
momentum METROPOLITAN AQVAO THANK YOU ‘momentum Mf GUARDRISK®:
Momentum Metropolitan Holdings — Debt Investor Presentation (December 2020) on 6ix